Volvo’s Most Important SUVs Are On The Verge Of Becoming American-Made Hybrids

After a record year in 2024, Volvo is scrambling in 2025. A big drop in income in the first quarter has the company looking to trim nearly $2 billion in costs. The Swedish automaker is looking to make the most of its resources, and that includes making sure its production facilities are running at max capacity.

To help it do that, the automaker is reportedly looking to build more vehicles in the US. The South Carolina plant, home to the EX90 electric SUV, could get some company in the form of a new hybrid model.

Volvo Has Serious Unused Capacity

Volvo’s SC factory first opened in 2017, building the S60 sedan for the US and abroad. Since then, it has stopped building the sedan to make room for the Polestar 3 and the EX90. But neither electric model is exactly selling in big numbers, and that has the new and expensive plant not doing much to help the company.

At the same time, the models that Volvo does sell in high numbers aren’t built in the US. It recently killed off the S90 because of tariffs (it was built in China), and most of the rest are built in Europe, meaning they’re still subject to import tariffs.

Related

Volvo ES90 Arrives As The Most Powerful Volvo Yet

And now it’s a hatchback.

What does Volvo want to move? “It has to be a car with mild-hybrid and plug-in versions to really bring up the volumes,” Hakan Samuelsson told Automotive News after the earnings results announcement.

XC60, XC90 PHEVs Most Likely To Move

That makes the most likely candidates the XC60 and XC90 SUVs. Not only are they high-volume sellers, but they are offered as both hybrid and PHEV variants. Crucially, they’re also built on Volvo’s Scalable Product Architecture platform. Volvo re-tooled the SC plant to build the EX90 on its EV-exclusive platform, but, reportedly, the old SPA tooling used to build the S60 is still there.

Last year, Volvo sold 125,243 new vehicles in the US. The top sellers were the XC60 and XC90, making up around two-thirds of the brand’s sales.

In the US, Volvo currently offers the brand-new XC90 as a mild hybrid gas model or the $74,295 XC90 PHEV with 32 miles of all-electric range. The XC60 is also available with gas mild hybrid power or as a PHEV with similar range for $59,345. Tariffs would have a massive impact on both, and while moving final production to the US would help reduce it, Volvo still wouldn’t be immune. The Swedish automaker has already moved production of one model due to tariffs. The EX30 moved from China to Belgium to avoid Biden Administration electric vehicle tariffs.

Related

Volvo Goes Back To Its Ex To Try Get Its Mojo Back

The CEO who led the company to its biggest year in almost a century is out. Could this mean the reintegration of Polestar? It’s a long shot…

Volvo is currently in the process of building an EV battery plant in Ontario, Canada. Production of cells is expected to start there by 2027, and those cells could feed US-made EVs and possibly help reduce the tariff burden.

Ironically, it was vehicle import tariffs that first brought Volvo production to North America. Volvo operated a series of three factories in Nova Scotia, Canada, building vehicles from 1963 to 1998. It sent over completely knocked-down vehicle kits for final assembly under an agreement called Auto Pact, which was a vehicle-specific predecessor to NAFTA.

Source: Automotive News